New Zealand’s Performance Management Program for Primary Health Organizations

Introduction
Primary health care is the cornerstone of the health care system in New Zealand and has a long history of being at the center of structural, and at times ideological, reforms. An unsuccessful attempt in the early-1990s to create a market-based system of competing purchasers and providers was followed, after the 1996 election, by the creation of a single national health purchaser. In 1999, the political pendulum swung again with a new Labour-led coalition government that distanced itself from market-based approaches and initiated a new radical reform of primary health care that moved toward greater control and financing by the government. General practitioners (GPs) have maintained their independence to operate as private practices and the right to charge patients fees for their services through these numerous fundamental reforms and swings of the political pendulum.
 
Throughout its evolution, primary health care in New Zealand has been funded by a partial fee-for-service payment from the government for consultations and pharmaceuticals, supplemented by substantial co-payments from patients. The high level of fees and copayments has been an ongoing political issue in New Zealand, as the social inequalities in GP access are exacerbated by the fee-for-service payment and high co-payments. Despite some targeting of government subsidies to higher need populations, inequalities in access have persisted, with poorer people and Mäori often having higher health needs but using services at a lower rate (Barnett & Barnett, 2004). Fee-for-service not only has created barriers for some high-need patients, but also has provided little incentive for collaborative approaches by GPs or linkages with other parts of the health sector (Barnett & Barnett, 2004).
 
Under the umbrella of the New Zealand Health Strategy of 2000, the Primary Health Care Strategy introduced population-based approaches to address the growing inequalities (New Zealand Health Strategy, 2000). A set of 13 population health priorities and three priorities for reducing specific health inequalities were identified in the strategy, and reducing ethic health disparities was an over-arching goal of the strategy. A new organizational structure, primary health organizations (PHOs), was established to focus on the priority health areas identified in the strategy and to address problems of access to services and a lack of coordination between providers.
 
A pay-for-performance program was introduced in 2006, the PHO Performance Management Programme to strengthen the role of PHOs and sharpen their focus on the population health and inequality priorities This program is one piece of an overall quality framework and was designed by primary health care representatives, DHBs and the Ministry of Health to reinforce the combined health sector efforts to improve the health of enrolled populations and reduce inequalities in health outcomes through supporting clinical governance and rewarding quality improvement within PHOs.
 
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